LCFF Has strong Support but Law is Still "a Work in Progress"

California’s school funding law, the Local Control Funding Formula (LCFF), has strong support and is helping some school districts’ spending become more strategic and targeted, but law is still “a work in progress,” researchers say

Implementation of the law is uneven, equity purposes not universally understood, and LCAP template needs overhaul, according to new report by the Local Control Funding Formula Research Collaborative

STANFORD, CA—April 28, 2017—The California law that simplified how education dollars are allocated across the state, vastly expanded local fiscal control, and altered education governance is helping some school districts spend money more strategically and target supplemental support to low-income students, English Learners, and foster youth, according to a new report released today by the Local Control Funding Formula Research Collaborative (LCFFRC), a group of leading California education researchers from various organizations and institutions who have been studying LCFF implementation for three years.

The report—the third in a series of studies and based on eight in-depth case studies of districts mirroring California’s demographic and geographic diversity—also reveals that LCFF has been implemented unevenly in districts. Many districts lack organizational capacity to engage stakeholders or develop cohesive plans as the law intended, and there is not universal understanding of the equity purposes of the law, the report says.

“The good news is that as districts implement the LCFF, they are working toward more transparency, coherence, and equity than was possible under the previous law that used complicated formulas and directed money to mandated programs that were sometimes ineffective and often ignored student needs,” says Julia E. Koppich, a member of the LCFF Research Collaborative and an education policy expert based in San Francisco. “With LCFF, we’re seeing districts and schools work differently, real collaboration between budget directors and program officials, and a new focus on students in resource allocation. But there a few aspects of the law that still need attention.”

“Districts have had a steep learning curve,” says Daniel Humphrey, a member of the Research Collaborative and the former director of the Center for Education Policy at SRI. “They are trying to understand how the LCFF fits in with what they’ve been doing and how to create accountability plans that embrace the spirit of local control, engaging all the key players and using information and funding in strategic ways that improve learning.”

The implementation of the California school finance law is being watched closely by lawmakers and education policy and school finance experts nationwide. Multiple states have been attempting to grapple with education finance reforms in the past few years. As a result, there have been legislative proposals in South Carolina, Connecticut, Georgia, Washington, and Kansas that reflect one or more of the key policy changes in LCFF including local control, equity-based funding models, and/or community engagement mandates.

Key findings

Districts made good faith efforts to allocate supplemental and concentration funds to the target student groups. While resources are always tight and districts have significant pressure to spend money on the next new thing, or to use funds to simply cover current costs, the study reveals that districts are allocating supports to target groups.Typically, these investments included hiring counselors and social workers, adding tutors and subject area specialists, expanding Advanced Placement programs, and enhancing teacher professional development opportunities.

Budgeting is more collaborative and, in some cases, is becoming more school-based. As a result of LCFF, districts introduced a more collaborative budget making process that breaks down traditional department silos to ensure money is spent to advance district goals. The study found that most budget decisions continued to be made centrally though six of the study eight districts moved some measure of resource allocation discretion to schools.

Researchers found varying levels of strategic coherence in district planning and implementation. While researchers noted that some districts have moved on from the fragmented, regulatory compliance of categorical funding to more strategic and coherent planning and budgeting, districts varied significantly in their levels of overall strategic coherence. Some districts had consistent articulated goals, strategies and resource allocation decisions aligned to these goals, and metrics to evaluate progress. Others displayed only moderate or quite low levels of coherence. Key barriers include the compliance and “categorical mindset” of some district leaders, which, educators told the researchers, is reinforced by the LCAP template.

Districts varied in the extent to which they engaged educators, parents, and community leaders in planning. While LCFF requires education stakeholders to be engaged in developing LCAPs, their involvement has not happened quickly or easily, the report reveals. Educators recognize that some of what they’ve tried in the past has not succeeded and how challenging it is to engage stakeholders in a meaningful way and are trying new approaches. The report also notes that school districts that shift resources to schools, give principals an active role in organizing school-based parent and educator feedback, and have positive labor management relations have been most successful in creating more active involvement.

School boards had limited involvement in LCAP planning. Surprisingly, researchers found little evidence that school board members—local elected officials charged with overseeing spending and school performance--were engaged in creating LCAPS for their districts beyond approving the accountability plan the district staff developed.

Researchers noted continuing confusion about which funds should be included in LCAPs. One district included only supplemental and concentration funds, another included all of its state (base, supplemental, and concentration) and federal funds. The other six districts’ LCAPs included various portions of their state and federal funds. Some districts appeared unclear about the appropriate use of supplemental and concentration dollars.

Some districts are confused about what the equity focus of the law is meant to accomplish. While the LCFF itself does not include a definition of equity, statements from key state leaders such as the Governor, and guidance from state agencies such as the California Department of Education (CDE) clarify the equity intent of the law, namely, that ensuring equity of opportunity for all students requires unequal funding to provide support and services to targeted to low-income students, English learners, and foster youth. Six of the eight study districts hewed to this definition of equity, viewing the LCFF as a mechanism to distribute more resources to their students with greater needs. But two districts appeared to be operating from alternative definitions that were focused on other principles such as serving students whom the district believed might benefit the most or providing equal funding regardless of economic circumstances. These differing interpretations of equity may be outliers but suggest that the state’s intended definition of equity is not universally understood.

Researchers found significant variation in the extent to which support for Common Core Standards appear in their LCAPs. In three of the eight districts, standards implementation was a prominent part of the districts’ LCAP, frequently identified as key goals and strategies. Typically, these districts allocated significant resources for standards-based professional learning and specific supports to help target students master the standards. Two districts made no to minimal explicit mention of the state standards in their LCAP and evidenced little connection between standards implementation and the LCAP. The remaining districts fell somewhere in-between.

Recommendations
“The findings point to some clear areas where the state and districts need to make adjustments,” says Julie Marsh, an associate professor of education policy at the University of Southern California and a member of the LCFF Research Collaborative. “Districts need help in understanding the intent of the policy and more support in key areas, such as how to relate investment decisions to outcomes, how to evaluate progress toward goals, and how to broaden and deepen stakeholder engagement. The state can help districts by making available examples of exemplary district, charter school, and County Office of Education practices that illustrate ways to better meet the intent of the law.”

“Equally important, the state board of Education and the California Department of Education needs to clarify and communicate the intent of the LCFF, encourage investment in capacity building efforts to support local implementation, and revamp the LCAP template,” says Jennifer O’Day, part of the LCFFRC and a researcher at the American Institutes for Research.

Specifically, the report calls on education officials to review the efficacy of the revised LCAP template and allow districts to experiment with new tools.

“Our research has shown that the LCAP cannot achieve the multiple purposes ascribed to it: 1) stakeholder engagement and communication, 2) strategic planning and budgeting, and, 3) accountability for equity,” the report says.

It calls on the state to collect and analyze data on implementation of the recently revised LCAP template to see if it is helping districts achieve the law’s intent. The state also should allow local districts to develop alternative tools and approaches to achieve the LCAP’s purposes, with the California Collaborative for Educational Excellence (CCEE) assessing and certifying locally developed alternative tools and districts then should be authorized to select from a menu of approved tools, including the current LCAP template.

Methodology
The report is based on eight case studies, seven in traditional districts and one in a charter management organization. Study sites reflected statewide variation in geographic location, size, urbanicity, and demographics. To collect data, researchers conducted 151 interviews with administrators, parents, community members, union leaders, and board members in fall 2016 and examined a range of relevant documents, including LCAPs, district budgets, collectively bargained contracts, strategic plans, and school site plans.

Copies of the latest report, Paving the way to Equity and Coherence? The Local Control Funding Formula in Year 3, are available from Policy Analysis for California Education. Click here to access this report and two previous reports.